Shaping a neighborhood's destiny from the shadows

BIDs are the brainchild of Dan Biederman, who persuaded midtown business leaders to pool funds for cleaning and restoration of Bryant Park back in the late 1970s.

In the late 1970s, most New Yorkers wouldn't dare set foot in Bryant Park. In just the first half of 1976, the park saw 43 arrests for muggings and 52 for drug possession. TheNew York Times called it "a cesspool of crime and vice." Businesses warned their employees to stay out, and a community board chairman suggested closing the park entirely.

In this dystopia, an entrepreneur named Dan Biederman saw an opportunity. At a time when New York City couldn't afford to maintain its parks, no new police officers were being hired and the number of workers on sanitation trucks was reduced to two from three, Biederman persuaded a group of midtown business leaders to take control of their neighborhood by pooling private funds to clean and restore the park and help rekindle a sense of law and order. In 1980, the Bryant Park Restoration Corp. was born, providing the blueprint for a series of business improvement districts—BIDs—that would help revitalize some of the city's sketchiest neighborhoods over the ensuing decades.

"Getting political leaders to sign off on the BID was rocket science because no one wanted to privatize a park," Biederman recalled. "But look at the result today: Bryant Park is a gem."

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"Make no mistake, BIDs may help small businesses when it suits them. But their fundamental role is advancing the interests of property owners"

Biederman's brainchild has since spread all over the city, which now boasts 72 BIDs serving some 85,000 businesses. Over the years, the mission of BIDs has grown beyond sanitation and security to include services the city can't or won't pay for, such as planting shrubs or hiring musicians in an effort to create a welcoming street environment. But these landlord-controlled shadow governments are raising questions about the city's ability to provide necessary services while highlighting the rewards and risks of privatizing public spaces.

BIDs have also become big businesses in their own right—Biederman is paid $586,000 a year to run BIDs around Bryant Park and West 34th Street, nearly three times what Mayor Bill de Blasio earns for running the entire city. Clearing litter from sidewalks and gutters accounts for only 25% of the $130 million the city's BIDs spend each year. They also promote member businesses, serve as liaisons to government services and decorate shopping districts during holiday seasons. "We keep the area clean, safe and marketed," said Michael Lambert, executive director of the Bedford-Stuyvesant BID and co- chairman of the New York City BID Association.

But as BIDs grow in size and scope, so do complaints about them. "They are cartels for landlords," said Moshe Adler, an adjunct professor of urban planning at Columbia University. "Make no mistake, BIDs may help small businesses when it suits them. But their fundamental role is advancing the interests of property owners."

Power brokers

Big BIDS are increasingly influential players at City Hall. Carl Weisbrod, the founding president of the Alliance for Downtown New York, the nation's largest BID, with $17 million in annual revenue, now heads the Department of City Planning. The Times Square Alliance was the driving force behind City Council legislation adopted earlier this year that corralled Elmo and other street performers into a designated corner of the pedestrian plaza. BIDs also lobbied the city to crack down on the fraudulent clothing- donation bins that once riddled streets and now are pressing to rein in street vendors.

Perhaps the most noteworthy accomplishment by any BID happened earlier this year, when the Alliance for Downtown New York teamed up with the de Blasio administration to persuade the council to let landlords rent 110,000 square feet of designated public space to commercial retailers. Jerold Kayden, a Harvard professor of urban planning and design, estimated the move boosted the value of the rezoned properties by as much as $77 million, a windfall for their owners—including Brookfield Asset Management and RXR Realty—which are, of course, Alliance members.

What remains unclear, however, is how BIDs' expanding influence jibes with their original mandates. "The big BIDs have achieved their mission of cleaning up their areas," said Rachel Meltzer, an urban policy professor at the New School. "They are now trying to figure out new ways to be useful."

Before the City Council approves a new BID, landlords must agree to perpetually fund the organization via assessments on their properties, typically a few hundred dollars per month depending on square footage and sidewalk frontage. Usually these expenses are passed on to commercial tenants through higher rents. By law, BID boards are controlled by landlords, which doesn't sit well with some business owners. "In a country that was founded by a revolution against taxation without representation, it's clear this is a huge issue," Alex Duffy, founder of a nonprofit theater in Brooklyn, said at a City Council hearing last year.

There is also evidence that BIDs hurt some retailers. A study published in the Journal of Planning Education and Research in 2014 showed that sales and employment at shops within New York City BIDs fared worse than at those outside the districts. The study's author, Stacey Sutton, a professor at the University of Illinois at Chicago, said it could be that BIDs help make neighborhoods more desirable, which attracts new shops and puts pressure on existing merchants to compete.

Yet BIDs continue to proliferate throughout the boroughs. Some 25 are currently being created or expanded, and the city plans to double the number of full-time staffers who oversee them. Mayor de Blasio lauded BIDs last February when he signed a bill expanding several of them. "It will mean more and better services locally, clean and inviting streets, initiatives that help our small businesses to attract more customers," he said.

One would hardly know from his sunny endorsement that the growth of BIDs is unleashing fierce power struggles across the city. Fistfights broke out at a Chinatown meeting a few years ago when local landlords voted to create a BID. The latest battlefront is in Jackson Heights, where some merchants are trying to stop political and business leaders from creating the largest BID in the city. "This is where we make a stand," said Tania Mattos, who is part of a group called Queens Neighborhoods United. "The spread of BIDs has to stop here and now."

Lighting the way

Almost every day, a group of lawyers piles into a van and trolls the streets of New York, collecting testimony from people injured in accidents, exposed to asbestos or otherwise wronged. "Driving Legal Services Right to Your Doorstep," reads the sign for the van's Bronx-based owner, the Dearie Law Firm. Occasionally, the firm gets a call from an irate BID director demanding that the van stop blocking traffic or hogging parking spaces. "Sometimes I look in the mirror and say, 'Who's the bastard who thought up BIDs?'" said the firm's founder, John Dearie.

The mirror is a good place to look: Dearie, as a state assemblyman in the early 1980s, sponsored legislation pushing for more BIDs in New York City. But the concept first arose among city planners in the 1970s. As people fled to the suburbs and urban tax bases collapsed, New York didn't have enough money to fund public services such as sanitation and security. The idea was to create a dedicated stream of privately generated revenue to provide public sanitation services by taxing the businesses that would benefit most. After Dearie's bill was signed into law by Gov. Hugh Carey in 1981, BIDs popped up in Union Square and Times Square and around Grand Central Terminal, then fanned out across the city.

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Buck Ennis

Sergio Ruíz of La Estrella bakery has rallied with Tania Mattos, part of a group called Queens Neighborhoods United, who is trying to stop the spread of BIDs.

By the mid-1990s, once-derelict neighborhoods like Bryant Park and Times Square became safe public spaces again and BIDs emerged as a political and economic force. To fund expansion projects, Biederman—who converted the Bryant Park Restoration Corp. into a BID in 1988—issued tax-exempt bonds, just the way a municipality would, and hired Goldman Sachs and JPMorgan to line up institutional investors. But Mayor Rudy Giuliani, worried that BIDs could undermine his political power, knocked them down a peg by leaking stories that employees of the Grand Central BID were roughing up homeless people. An investigation was launched by the U.S. Department of Housing and Urban Development, which provided grants to the BID. "We are not in the business of subsidizing thuggery," said HUD's assistant secretary at the time, Andrew Cuomo.

Mayor Michael Bloomberg, however, was more hospitable to BIDs and encouraged neighborhoods to form them. His administration preferred BIDs to merchants associations and chambers of commerce because membership wasn't voluntary, ensuring steady funding. "The lights are always on at a BID," said Bed-Stuy's Lambert.

While BIDs in Times Square and around Grand Central have budgets over $12 million, large staffs and public-relations firms on retainer, Bed-Stuy is typical of younger, outer-borough BIDs, with its annual budget of just $700,000. About a third of that goes for sweeping up trash, removing graffiti and painting street fixtures. (BIDs pay their cleanup crews about a third of what the city pays sanitation workers and often hire workers from places like the Doe Fund, a nonprofit that provides jobs and shelter to the homeless.) The BID also installed 24 video cameras along the Fulton Street business corridor, providing footage to aid the police in solving crimes and help merchants dispute fines when someone dumps garbage in front of their shops.

In many ways, the BID has been quite useful for the Bed-Stuy business community, said Joyce Turner, the BID's chairman, who also runs a real estate brokerage and tax-preparation firm. When she and a neighboring pizza restaurant were having trouble with their electricity, the BID got in touch with Con Edison to help resolve the issue. When the eatery was not given sufficient time to address Department of Health violations, the BID prevailed upon the agency to lay off for a while. "If you have something to say, it's easier to say it as part of a group," said Turner.

Yet while the BID can play the role of advocate, it can also have considerable power in influencing which businesses stick around and which don't.

It plays out like this: Lambert thinks the eastern half of the Bed-Stuy BID is "a bit flush" with hair and nail salons, and he'd like to see more variety in stores and services. His organization tracks how often locals leave the district to shop and shares that data with property owners. "Maybe the next time you have a vacancy you'll consider that," Lambert tells landlords.

Map of NYC's 72 BIDs. Hover over each dot to view more information.

That practice doesn't sit well with Edmon Braithwaite, who owns Nostrand Wines & Liquors and led the move to form the Bed-Stuy BID seven years ago. The salons that Lambert finds too abundant are a major entry point into entrepreneurship for minority and female business owners, and Braithwaite argues that by nudging them out, the BID is hurting the people who deserve to thrive during the neighborhood's renaissance. Community support is all the more necessary as national chains move in, brownstones fetch millions and commercial rents soar. Those economics have translated into nearly one empty storefront for every five along Fulton Street—more than triple the vacancy rate Lambert advocates. "I fought hard to create the BID because I thought it would help take the neighborhood to the next level," Braithwaite said. "Maybe I was naive."

More battle lines

As she approached the corner of Junction Boulevard and Roosevelt Avenue in Jackson Heights, Leslie Ramos saw an overflowing trash can. It's a common sight in this part of Queens. "I take offense to the idea that immigrant and working-class communities can't be beautiful," said Ramos, who was raised in Williamsburg by Puerto Rican parents.

Messy waste bins are just one sign of how the economic revival that has transformed neighborhoods all over the city has bypassed Jackson Heights, where a higher percentage of the population lives in poverty than a decade ago. While crime overall has declined in line with city figures, there were more rapes and felony assaults in Jackson Heights last year than in 2001.

There's not much Ramos, a former city housing official, can do about crime. But she has a prescription for the neighborhood's garbage problem: make the three-block-long BID she runs in Jackson Heights the city's largest. If area landlords agree to expand it from 82nd Street two miles east to 114th Street, the BID would clean up garbage, plant trees, fix park benches and help make the stretch underneath the No. 7 train more appealing. Such improvements, Ramos says, would attract new investment and help Jackson Heights capture its share of the city's rising fortunes.

Her vision for Roosevelt Avenue can be seen on 82nd Street, near her BID's headquarters. The corridor is free of garbage, sidewalks are lined with flowerpots and there's barely a vacant storefront. Independent businesses like the $5 Shoe Warehouse share the street with Bank of America and Chase branches and numerous chains including Banana Republic, the Children's Place, Duane Reade, Gap and GNC. "It shouldn't only be white communities that have amenities," Ramos said.

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Buck Ennis

Edmon Braithwaite, who owns Nostrand Wines & Liquors and led the move to form the Bed-Stuy BID seven years ago, worries the organizations can exert outsized control over neighborhood businesses.

But not everyone is so impressed. Tania Mattos looks at the same scene with revulsion. "It used to be Calle Colombia," she said, referring to the street's Latino character. "Now it's Calle Corporate."

For more than three years, Mattos has been leading the fight against expanding the BID, which she sees as a Trojan horse for gentrification that will force out longtime residents and business owners. She would prefer a merchants association, where local business owners, not landlords, would call the shots. "Do we really need those who say they know better dictating our neighborhood's future?" she said.

So far, Mattos has fended off the expansion by mobilizing opposition from about 200 business owners, a healthy chunk of the nearly 1,000 commercial tenants who would be in the new BID. One such merchant is Leni Juca, who runs Oxium Copy & Print Center on Roosevelt Avenue. "BIDs see where minorities are improving things on their own and they say, 'OK, let's go in there.' And then rent goes up, people have to move out.

"I'm like anyone else," Juca went on. "I love New York because you can get on the subway and go to an Indian restaurant, a Chinese neighborhood or anywhere else you can imagine. That's what people like about New York, and that's what we have here. Why not protect this?"

That local resistance makes it unlikely that the city will approve the bigger BID anytime soon. While the law says approval by 51% of landlords is all that's required to create or expand a BID, officials like to see broader backing before signing off. "We don't want to help create BIDs that aren't strong, because we'll be overseeing them in perpetuity," said Michael Blaise Backer, deputy commissioner of BIDs at the Department of Small Business Services. "We want to see broad-based support."

Ramos, who became leader of the Jackson Heights BID in 2014, is trying to convince a skeptical community that the benefits are worth the cost. She reckons assessments will only be about $270 annually per business. "That's the equivalent of three garbage violations," she said. "And most businesses get more than three." She's expanded her steering committee and is lining up grants so shopkeepers can get free training on how to make their awnings and windows more attractive.

"It can be such a setback for immigrants when their business fails because they don't have many resources to fall back on," Ramos said. "Being an advocate is in my blood. I think they will understand that. Eventually."

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